MEXICO CITY {AP} After months of optimism, Mexico's government said that its once-thriving economy has slowed because of lower oil prices and a sluggish U.S. economy.

The announcement was the Mexican government's first direct acknowledgment that the U.S. economic slowdown has trickled south, costing more than 96,000 private sector jobs and forcing President Vicente Fox to tighten government spending again.

Yet the news late Sunday night hasn't been all bad. Many analysts applauded the government for its willingness to release economic data and detail its plans to deal with slowing income levels. Others said the slowdown is a welcome change after last year's whopping 7 percent growth, which sparked fears of runaway inflation.

In an effort to keep the fiscal deficit at 0.5 percent of gross domestic product, Fox's government announced late Sunday that it would slash spending by 3.38 billion pesos ($367 million), or 0.25 percent  the amount by which income dropped below estimated levels in the first quarter. Officials have not said where they will cut.

"We are definitely feeling the effect of this slowdown," said Jonathan Heath, an independent economist based in Mexico City. "In fact, it's more pronounced in Mexico than in the United States."

But on Monday, Fox's spokeswoman, Martha Sahagun, downplayed any fears of a recession after five straight years of growth.

"We are not in a moment of crisis," she said. "Mexicans have to be informed of the absolute truth: That this is not happening to the Mexican economy."

Despite the government's optimism about the economy, there have been signs for months that Mexico  which sends nearly 85 percent of all exports to its northern neighbor  would not escape being dragged down with the U.S. economy.

In March, Motorola said would lay off as many as 1,000 workers from its broadband communications division in Mexico.

Still, the news hasn't been all bad for Mexico.

Several companies have announced that they plan to close plants in the United States and move them south, including an industrial glove factory that will take 750 jobs from Wilkesboro, N.C.

In March, Bank of Mexico Governor Guillermo Ortiz said the country had attracted $10 billion in capital inflows in the first quarter, helping increase the peso's value nearly 3 percent since the beginning of the year. Yet, the strong peso also has hurt the country's exports.

Armand Peschard-Sverdrup, director of the Mexico Project at the Washington-based Center for Strategic and International Studies, said markets have responded favorably to the government's willingness to release honest, accurate economic data.

Fox has campaigned hard for sustainable growth, proposing an austere 1.3 trillion-peso ($141 billion) budget and a highly unpopular sales tax on food and medicine  an effort designed to help the government raise extra revenues.

The government has already seen a 41 percent drop in income in the past year from Mexico's state-run oil company Petroleos Mexicanos, or Pemex  a result of lower oil prices, the decision to cut crude oil exports with the Organization of Petroleum Exporting Countries, the strong peso and the financing of natural gas sales to local industry.

Still, most Mexicans seem unconcerned.

Studying job offers posted outside a packed Mexico City employment office, Luis Hernandez believes his country's economy will weather the U.S. slowdown. He's even been looking for a better-paying job than the one he has now at a bank.

"Here in Mexico, there is work," he said. "You can't live like a rich man, but you can eat."